OKLAHOMA CITY--(BUSINESS WIRE)--
Devon Energy Corp. (NYSE: DVN) today reported operational and financial
results for the first quarter of 2018. Also included within the release
is the company’s guidance outlook for the second quarter and full-year
2018.

“Devon delivered oil production at the high end of guidance and
accelerated efficiency gains across the portfolio in the first quarter,”
said Dave Hager, president and CEO. “Our performance was highlighted by
commencing production on the highest-rate wells in the 100-year history
of the Delaware Basin and efficiencies at our STACK Showboat project,
which resulted in savings of $1.5 million per well and first production
40 days ahead of plan.

“Based on our strong year-to-date results and the confidence we have in
our Delaware and STACK focused capital programs, we are raising our
full-year oil production outlook,” Hager said. “Importantly, we are
delivering this incremental production with lower costs. We expect
per-unit lease operating expense to decline 5 to 10 percent by year-end,
and we are on pace to reduce G&A and interest costs by $175 million
annually.”

Operating Cash Flow Increases 11 Percent

In the first quarter of 2018, Devon’s operating cash flow totaled $804
million, an 11 percent increase from the fourth quarter of 2017. Devon
reported a net loss totaling $197 million, or $0.38 per diluted share,
in the first quarter. The quarterly loss was attributable to a $312
million charge related to the early retirement of debt. Adjusting for
this one-time charge and other items securities analysts typically
exclude from their published estimates, the company’s core earnings were
$108 million, or $0.20 per diluted share, in the quarter.

Delaware and STACK Driving 2018 Oil Production Guidance Higher

Overall, total production averaged 544,000 oil-equivalent barrels (Boe)
per day in the first quarter. Oil accounted for the largest component of
the product mix at 46 percent of total volumes.

The majority of Devon’s production was attributable to its U.S. resource
plays, which averaged 413,000 Boe per day. The strongest performance in
the U.S. was driven by the company’s Delaware and STACK assets, where
combined oil production increased 16 percent compared to the prior
quarter. This robust growth drove U.S. oil production to the top end of
guidance, averaging 122,000 barrels per day for the quarter.

Based on strong year-to-date results, Devon is raising its 2018 guidance
for U.S. oil production. With the production raise, the midpoint of the
company’s guidance for 2018 U.S. oil production now represents an
estimated growth rate of 16 percent compared to 2017, up from the
previous guidance of 14 percent. The improved outlook is driven by a
combination of improving well productivity in the Delaware and STACK and
efficiency gains compressing cycle times with development projects.

High-Rate Boundary Raider Wells Set Delaware Basin Record

The company’s development programs across its U.S. resource plays had
another strong quarter of performance. In the Delaware, new well
activity was headlined by two massive Boundary Raider wells that
achieved a combined 24-hour initial production rate of approximately
24,000 Boe per day (80 percent oil). These are the highest-rate wells
brought online in the history of the Delaware Basin.

In the STACK, Devon commenced production on 12 high-rate wells that
averaged initial 30-day rates of 3,500 Boe per day (55 percent oil). The
most prolific STACK wells for the quarter belonged to the four wells
from the Coyote development that delivered average 30-day rates of 4,400
Boe per day.

For additional details on well results and other information about
Devon’s E&P operations, please refer to the company’s first-quarter 2018
operations report at www.devonenergy.com.

Showboat Project Online 40 Days Ahead of Plan

Devon’s upstream capital was $664 million in the first quarter, 2
percent above the guidance range. This variance was driven primarily by
efficiencies achieved at the company’s STACK Showboat project, where
first production was achieved approximately 40 days ahead of plan,
resulting in an acceleration of capital spend.

The efficiencies at Showboat were driven by a 30 percent improvement in
drilling time and the doubling of completion stages per day compared to
prior activity in the area. Overall, these operating improvements
delivered cost savings of $1.5 million per well at Showboat.

With the better than expected efficiencies compressing cycle times
across development projects and pulling forward activity, Devon now
expects its capital to trend toward the high end of its 2018 guidance of
$2.2 billion to $2.4 billion. The accelerated activity due to
efficiencies will benefit both the 2018 and 2019 production profile.

Upstream Revenue in U.S. Advances and EnLink Profitability Expands

The company’s upstream revenue in the U.S. totaled $1.0 billion in the
first quarter, a 36 percent improvement compared to the fourth quarter
of 2017. Contributing factors to the strong revenue growth were higher
commodity price realizations and growth in higher-margin, light-oil
production.

In Canada, upstream revenues totaled $302 million in the first quarter.
The company benefitted from Western Canadian Select (WCS) basis swaps on
approximately 50 percent of its estimated Canadian oil production in the
first quarter, generating cash settlements of $97 million.

Devon’s midstream business generated operating profits of $277 million
in the first quarter, increasing 42 percent year over year. This growth
was driven by the company’s investment in EnLink Midstream. Devon has a
64 percent ownership interest in EnLink’s general partner (NYSE: ENLC)
and a 23 percent interest in the limited partner (NYSE: ENLK). In
aggregate, the company’s ownership in EnLink has a market value of
approximately $3 billion and is projected to generate cash distributions
of $270 million in 2018.

Regional Basis Swaps Provide Price Protection

The company currently has about 60 percent of its expected oil and gas
production protected for the remainder of 2018. These contracts consist
of collars and swaps based off the West Texas Intermediate (WTI) oil
benchmark and the Henry Hub natural gas index. Additionally, Devon has
entered into regional basis swaps in an effort to protect price
realizations across its portfolio in the U.S. and Canada, including
attractive WCS and Midland basis oil hedges. The volume and pricing
details associated with the company’s hedges are provided in the tables
within this release.

Per-Unit Production Expense to Improve Throughout 2018

Devon’s production expense totaled $543 million, or $11.08 per Boe, in
the first quarter, in line with guidance. New revenue recognition
accounting rules were implemented in the first quarter, resulting in a
$62 million increase to production expense. The new accounting rules
changed the way certain processing fees are presented for natural gas
and natural gas liquids. These fees were historically presented as
reductions to revenue but are now recorded to production expense. This
change had no impact on earnings or cash flow.

With growth in high-margin and low-cost production in the Delaware and
STACK, per-unit production expense is projected to decline 5 to 10
percent by year-end 2018.

G&A and Interest Savings to Reach $175 Million Annually

The company’s general and administrative expenses (G&A) totaled $226
million in the first quarter. Subsequent to quarter-end, with workforce
and non-personnel related cost reduction initiatives ongoing, the
company expects G&A expense to decline by 15 percent in the second
quarter. On an annualized run-rate basis, the company expects G&A
savings of approximately $110 million.

Net financing costs totaled $431 million in the first quarter. Excluding
the $312 million charge attributable to the early retirement of debt,
net financing costs for the first quarter were $119 million. With the
retirement of high-coupon debt in the first quarter, the company expects
to reduce net financing costs by approximately $64 million on an annual
basis.

In aggregate, these G&A and interest-reduction initiatives position
Devon to lower its costs by approximately $175 million annually.

Successful Tender Activity Reduces Upstream Debt

Devon’s financial position remains exceptionally strong, with
investment-grade credit ratings and excellent liquidity. The company
exited the first quarter with $1.4 billion of cash on hand. In March,
the company successfully repurchased $807 million of debt, reducing the
company’s consolidated debt to $10.0 billion. Excluding non-recourse
EnLink obligations, Devon’s stand-alone net debt is $4.7 billion.

In the first quarter, Devon announced that its board of directors
authorized a $1.0 billion share-repurchase program of the company’s
common stock. As of the end of April, Devon had repurchased 6.2 million
shares under the program at a total cost of $204 million, with an
average share purchase price of $33. Devon expects to complete the stock
repurchase program by the end of 2018.

The company’s board of directors also recently approved a 33 percent
increase to its quarterly common stock dividend to $0.08 per share,
compared to the prior rate of $0.06 per share. The new quarterly
dividend rate is effective in the second quarter of 2018.

Divestiture Program Achieves $1.1 Billion of Asset Sales

To further focus its resource-rich portfolio, Devon is targeting asset
divestiture proceeds in excess of $5 billion. In March, Devon advanced
this divestiture goal by announcing the sale of its Johnson County asset
in the southern portion of the Barnett Shale position for $553 million.
The transaction is expected to close during the second quarter.

In a separate transaction within the Barnett, the company formed a
partnership with DowDupont (“Dow”) in April. Under this arrangement,
Devon will monetize half its working interest across 116 gross undrilled
locations for an approximate $75 million payment from Dow spread over
the next five years. With this agreement, Devon will also drill and
operate up to 24 wells per year, with volumes dedicated to the EnLink
gathering and processing infrastructure.

Overall, these two Barnett transactions, combined with other recent
asset sales, have increased total divestiture proceeds over the past
year to $1.1 billion.

Non-GAAP Reconciliations

Pursuant to regulatory disclosure requirements, Devon is required to
reconcile non-GAAP (generally accepted accounting principles) financial
measures to the related GAAP information. Core earnings and core
earnings per share and other items referenced within the commentary of
this release are non-GAAP financial measures. Reconciliations of these
and other non-GAAP measures are provided within the tables of this
release.

Conference Call Webcast and Supplemental Earnings Materials

Also provided with today’s release is the company’s detailed operations
report that is available on the company’s website at www.devonenergy.com.
The company’s first-quarter conference call will be held at 10 a.m.
Central (11 a.m. Eastern) on Wednesday, May 2, 2018, and will serve
primarily as a forum for analyst and investor questions and answers.

Forward-Looking Statements

This release includes "forward-looking statements" as defined by the
Securities and Exchange Commission (SEC). Such statements include those
concerning strategic plans, expectations and objectives for future
operations, and are often identified by use of the words “expects,”
“believes,” “will,” “would,” “could,” “forecasts,” “projections,”
“estimates,” “plans,” “expectations,” “targets,” “opportunities,”
“potential,” “anticipates,” “outlook” and other similar terminology. All
statements, other than statements of historical facts, included in this
press release that address activities, events or developments that the
company expects, believes or anticipates will or may occur in the future
are forward-looking statements. Such statements are subject to a number
of assumptions, risks and uncertainties, many of which are beyond the
control of the company. Statements regarding our business and operations
are subject to all of the risks and uncertainties normally incident to
the exploration for and development and production of oil and gas. These
risks include, but are not limited to: the volatility of oil, gas and
NGL prices; uncertainties inherent in estimating oil, gas and NGL
reserves; the extent to which we are successful in acquiring and
discovering additional reserves; the uncertainties, costs and risks
involved in oil and gas operations; regulatory restrictions, compliance
costs and other risks relating to governmental regulation, including
with respect to environmental matters; risks related to our hedging
activities; counterparty credit risks; risks relating to our
indebtedness; cyberattack risks; our limited control over third parties
who operate our oil and gas properties; midstream capacity constraints
and potential interruptions in production; the extent to which insurance
covers any losses we may experience; competition for leases, materials,
people and capital; our ability to successfully complete mergers,
acquisitions and divestitures; and any of the other risks and
uncertainties identified in our Form 10-K and our other filings with the
SEC. Investors are cautioned that any such statements are not guarantees
of future performance and that actual results or developments may differ
materially from those projected in the forward-looking statements. The
forward-looking statements in this release are made as of the date of
this release, even if subsequently made available by Devon on its
website or otherwise. Devon does not undertake any obligation to update
the forward-looking statements as a result of new information, future
events or otherwise. The SEC permits oil and gas companies, in their
filings with the SEC, to disclose only proved, probable and possible
reserves that meet the SEC's definitions for such terms, and price and
cost sensitivities for such reserves, and prohibits disclosure of
resources that do not constitute such reserves. This release may contain
certain terms, such as resource potential, potential locations, risked
and unrisked locations, estimated ultimate recovery (or EUR),
exploration target size and other similar terms. These estimates are by
their nature more speculative than estimates of proved, probable and
possible reserves and accordingly are subject to substantially greater
risk of being actually realized.The SEC guidelines strictly
prohibit us from including these estimates in filings with the SEC.
Investors are urged to consider closely the disclosure in our Form 10-K,
available at www.devonenergy.com.
You can also obtain this form from the SEC by calling 1-800-SEC-0330 or
from the SEC’s website at www.sec.gov.

About Devon Energy

Devon Energy is a leading independent energy company engaged in finding
and producing oil and natural gas. Based in Oklahoma City and included
in the S&P 500, Devon operates in several of the most prolific oil and
natural gas plays in the U.S. and Canada with an emphasis on achieving
strong returns and capital-efficient cash flow growth. For more
information, please visit www.devonenergy.com.

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

PRODUCTION NET OF ROYALTIES

Quarter Ended

March 31, 2018

Oil and bitumen (MBbls/d)

U. S.

122

Heavy Oil

129

Retained assets

251

Divested assets

—

Total

251

Natural gas liquids (MBbls/d)

U. S.

91

Divested assets

6

Total

97

Gas (MMcf/d)

U. S.

1,002

Heavy Oil

12

Retained assets

1,014

Divested assets

163

Total

1,177

Total oil equivalent (MBoe/d)

U. S.

380

Heavy Oil

131

Retained assets

511

Divested assets

33

Total

544

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

PRODUCTION TREND

2017

2018

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Quarter 1

Oil and bitumen (MBbls/d)

STACK

21

25

27

30

35

Delaware Basin

30

30

31

32

36

Rockies Oil

13

13

12

15

18

Heavy Oil

137

122

121

132

129

Eagle Ford

46

34

28

27

23

Barnett Shale

1

1

1

1

1

Other

11

10

11

9

9

Retained assets

259

235

231

246

251

Divested assets

2

3

2

—

—

Total

261

238

233

246

251

Natural gas liquids (MBbls/d)

STACK

26

31

32

34

37

Delaware Basin

10

10

11

13

11

Rockies Oil

1

1

1

1

2

Eagle Ford

15

10

12

13

8

Barnett Shale

36

35

29

36

31

Other

2

3

2

3

2

Retained assets

90

90

87

100

91

Divested assets

8

7

7

6

6

Total

98

97

94

106

97

Gas (MMcf/d)

STACK

287

298

313

316

344

Delaware Basin

87

94

90

89

97

Rockies Oil

15

17

13

14

18

Heavy Oil

23

14

16

15

12

Eagle Ford

115

92

86

87

63

Barnett Shale

498

496

498

466

470

Other

12

13

10

13

10

Retained assets

1,037

1,024

1,026

1,000

1,014

Divested assets

191

184

175

175

163

Total

1,228

1,208

1,201

1,175

1,177

Total oil equivalent (MBoe/d)

STACK

95

105

111

117

129

Delaware Basin

54

55

57

60

64

Rockies Oil

17

17

16

19

23

Heavy Oil

141

124

124

134

131

Eagle Ford

80

60

54

55

41

Barnett Shale

120

118

113

114

110

Other

14

16

14

13

13

Retained assets

521

495

489

512

511

Divested assets

42

41

38

36

33

Total

563

536

527

548

544

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

BENCHMARK PRICES

(average prices)

Quarter 1

2018

2017

Oil ($/Bbl) - West Texas Intermediate (Cushing)

$

62.93

$

52.00

Natural Gas ($/Mcf) - Henry Hub

$

3.01

$

3.32

REALIZED PRICES

Quarter Ended March 31, 2018

Oil /Bitumen

NGL

Gas

Total

(Per Bbl)

(Per Bbl)

(Per Mcf)

(Per Boe)

United States

$

61.79

$

22.56

$

2.41

$

30.39

Canada

$

19.74

N/M

N/M

$

19.45

Realized price without hedges

$

40.15

$

22.56

$

2.41

$

27.75

Cash settlements

$

(0.10

)

$

(0.53

)

$

0.17

$

0.23

Realized price, including cash settlements

$

40.05

$

22.03

$

2.58

$

27.98

Quarter Ended March 31, 2017

Oil /Bitumen

NGL

Gas

Total

(Per Bbl)

(Per Bbl)

(Per Mcf)

(Per Boe)

United States

$

49.65

$

15.46

$

2.68

$

25.86

Canada

$

26.30

N/M

N/M

$

25.73

Realized price without hedges

$

37.33

$

15.46

$

2.68

$

25.82

Cash settlements

$

0.50

$

—

$

(0.03

)

$

0.15

Realized price, including cash settlements

$

37.83

$

15.46

$

2.65

$

25.97

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF EARNINGS

(in millions, except per share amounts)

Quarter Ended

March 31,

2018

2017

Upstream revenues (1)

$

1,319

$

1,541

Marketing and midstream revenues

2,491

2,010

Total revenues

3,810

3,551

Production expenses (2)

543

457

Exploration expenses

33

95

Marketing and midstream expenses

2,214

1,814

Depreciation, depletion and amortization

537

528

Asset impairments

—

7

Asset dispositions

(12

)

(3

)

General and administrative expenses

226

231

Financing costs, net

431

128

Other expenses

19

(31

)

Total expenses

3,991

3,226

Earnings (loss) before income taxes

(181

)

325

Income tax expense (benefit)

(28

)

8

Net earnings (loss)

(153

)

317

Net earnings attributable to noncontrolling interests

44

14

Net earnings (loss) attributable to Devon

$

(197

)

$

303

Net earnings (loss) per share attributable to Devon:

Basic

$

(0.38

)

$

0.58

Diluted

$

(0.38

)

$

0.58

Weighted average common shares outstanding:

Basic

527

525

Diluted

527

528

(1) UPSTREAM REVENUES

(in millions)

Quarter Ended

March 31,

2018

2017

Oil, gas and NGL sales

$

1,360

$

1,309

Derivative cash settlements

11

8

Derivative valuation changes

(52

)

224

Upstream revenues

$

1,319

$

1,541

(2) PRODUCTION EXPENSES

(in millions)

Quarter Ended

March 31,

2018

2017

Lease operating expense

$

241

$

223

Gathering, processing & transportation (see page 10)

228

163

Production taxes

59

55

Property taxes

15

16

Production expense

$

543

$

457

DEVON ENERGY CORPORATIONFINANCIAL AND OPERATIONAL
INFORMATION

REVENUE RECOGNITION – PRESENTATION CHANGE ONLY

In January 2018, we adopted ASC 606 – Revenue from Contracts with
Customers (ASC 606) and changed our accounting for certain
gathering, processing and transportation costs on a prospective basis.
The changes impact total revenues and total expenses by equal offsetting
amounts with no impact to net earnings. As a result of the adoption of
ASC 606 in the first quarter of 2018, our upstream revenues and
production expenses both increased $62 million. To facilitate
comparisons of our 2018 and 2017 upstream revenues and production
expenses, the following tables provide pro forma results, assuming ASC
606 had been applied beginning in January 2017.

Oil and gas property and equipment, based on successful efforts
accounting, net

13,475

13,318

Midstream and other property and equipment, net

7,908

7,853

Total property and equipment, net

21,383

21,171

Goodwill

2,383

2,383

Other long-term assets

1,915

1,896

Total assets

$

29,316

$

30,241

Current liabilities:

Accounts payable

$

862

$

819

Revenues and royalties payable

1,269

1,180

Short-term debt

354

115

Other current liabilities

997

1,201

Total current liabilities

3,482

3,315

Long-term debt

9,628

10,291

Asset retirement obligations

1,141

1,113

Other long-term liabilities

567

583

Deferred income taxes

773

835

Equity:

Common stock

53

53

Treasury stock, at cost

(12

)

—

Additional paid-in capital

7,269

7,333

Retained earnings

473

702

Accumulated other comprehensive earnings

1,122

1,166

Total stockholders’ equity attributable to Devon

8,905

9,254

Noncontrolling interests

4,820

4,850

Total equity

13,725

14,104

Total liabilities and equity

$

29,316

$

30,241

Common shares outstanding

526

525

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATING STATEMENTS OF OPERATIONS

(in millions)

Quarter Ended March 31, 2018

Devon U.S. &Canada

EnLink

Eliminations

Total

Upstream revenues

$

1,319

$

—

$

—

$

1,319

Marketing and midstream revenues

879

1,761

(149

)

2,491

Total revenues

2,198

1,761

(149

)

3,810

Production expenses

543

—

—

543

Exploration expenses

33

—

—

33

Marketing and midstream expenses

873

1,490

(149

)

2,214

Depreciation, depletion and amortization

399

138

—

537

Asset dispositions

(12

)

—

—

(12

)

General and administrative expenses

199

27

—

226

Financing costs, net

387

44

—

431

Other expenses

21

(2

)

—

19

Total expenses

2,443

1,697

(149

)

3,991

Earnings (loss) before income taxes

(245

)

64

—

(181

)

Income tax expense (benefit)

(34

)

6

—

(28

)

Net earnings (loss)

(211

)

58

—

(153

)

Net earnings attributable to noncontrolling interests

—

44

—

44

Net earnings (loss) attributable to Devon

$

(211

)

$

14

$

—

$

(197

)

OTHER KEY STATISTICS

(in millions)

Quarter Ended March 31, 2018

Devon U.S. &Canada

EnLink

Eliminations

Total

Cash flow statement related items:

Operating cash flow

$

610

$

194

$

—

$

804

Divestitures of property and equipment

$

47

$

1

$

—

$

48

Capital expenditures

$

(651

)

$

(181

)

$

—

$

(832

)

Debt activity, net

$

(1,111

)

$

122

$

—

$

(989

)

EnLink distributions received (paid)

$

67

$

(169

)

$

—

$

(102

)

Balance sheet statement items:

Net debt (1)

$

4,659

$

3,899

$

—

$

8,558

(1) Net debt is a non-GAAP measure. For a reconciliation of the
comparable GAAP measure, see “Non-GAAP Financial Measures” later in
this release.

CAPITAL EXPENDITURES

(in millions)

Quarter Ended

March 31, 2018

Upstream capital

$664

Land and other acquisitions

6

Exploration and production (E&P) capital

670

Capitalized interest

18

Other

13

Devon capital expenditures (1)

$701

(1) Excludes $181 million attributable to EnLink for the first
quarter of 2018.

DEVON ENERGY CORPORATIONFINANCIAL AND OPERATIONAL
INFORMATION

NON-GAAP FINANCIAL MEASURES

This press release includes non-GAAP financial measures. These non-GAAP
measures are not alternatives to GAAP measures, and you should not
consider these non-GAAP measures in isolation or as a substitute for
analysis of our results as reported under GAAP. Below is additional
disclosure regarding each of the non-GAAP measures used in this press
release, including reconciliations to their most directly comparable
GAAP measure.

CORE EARNINGS

Devon’s reported net earnings include items of income and expense that
are typically excluded by securities analysts in their published
estimates of the company’s financial results. Accordingly, the company
also uses the measures of core earnings and core earnings per share
attributable to Devon. Devon believes these non-GAAP measures facilitate
comparisons of its performance to earnings estimates published by
securities analysts. Devon also believes these non-GAAP measures can
facilitate comparisons of its performance between periods and to the
performance of its peers. The following table summarizes the effects of
these items on first-quarter 2018 earnings.

(in millions, except per share amounts)

Quarter Ended March 31, 2018

Before-tax

After-tax

AfterNoncontrollingInterests

Per DilutedShare

Loss attributable to Devon (GAAP)

$

(181

)

$

(153

)

$

(197

)

$

(0.38

)

Adjustments:

Asset dispositions

(12

)

(9

)

(9

)

(0.02

)

Asset and exploration impairments

10

7

7

0.01

Deferred tax asset valuation allowance

—

6

6

0.01

Fair value changes in financial instruments and foreign currency

63

62

61

0.12

Early retirement of debt

312

240

240

0.46

Core earnings attributable to Devon (Non-GAAP)

$

192

$

153

$

108

$

0.20

NET DEBT

Devon defines net debt as debt less cash and cash equivalents and net
debt attributable to the consolidation of EnLink Midstream as presented
in the following table. Devon believes that netting these sources of
cash against debt and adjusting for EnLink net debt provides a clearer
picture of the future demands on cash from Devon to repay debt.

(in millions)

March 31, 2018

Devon U.S. & Canada

EnLink

Devon Consolidated

Total debt (GAAP)

$

6,066

$

3,916

$

9,982

Less cash and cash equivalents

(1,407

)

(17

)

(1,424

)

Net debt (Non-GAAP)

$

4,659

$

3,899

$

8,558

DEVON ENERGY CORPORATION

FORWARD LOOKING GUIDANCE

PRODUCTION GUIDANCE

Quarter 2

Full Year

Low

High

Low

High

Oil and bitumen (MBbls/d)

U.S.

129

134

130

135

Heavy Oil

110

115

125

130

Retained assets

239

249

255

265

Divested assets

—

—

—

—

Total

239

249

255

265

Natural gas liquids (MBbls/d)

Retained assets

97

100

99

102

Divested assets

3

5

2

4

Total

100

105

101

106

Gas (MMcf/d)

U.S.

990

1,040

1,000

1,050

Heavy Oil

11

13

11

13

Retained assets

1,001

1,053

1,011

1,063

Divested assets

105

115

65

70

Total

1,106

1,168

1,076

1,133

Total oil equivalent (MBoe/d)

U.S.

391

408

396

412

Heavy Oil

112

117

127

132

Retained assets

503

525

523

544

Divested assets

21

24

13

16

Total

524

549

536

560

PRICE REALIZATIONS GUIDANCE

Quarter 2

Full Year

Low

High

Low

High

Oil and bitumen - % of WTI

U.S.

95

%

100

%

95

%

100

%

Canada

35

%

55

%

35

%

50

%

NGL - realized price

$

20

$

24

$

20

$

24

Natural gas - % of Henry Hub

73

%

83

%

73

%

83

%

DEVON ENERGY CORPORATION

FORWARD LOOKING GUIDANCE

OTHER GUIDANCE ITEMS

Quarter 2

Full Year

($ millions, except %)

Low

High

Low

High

Marketing & midstream operating profit

$

250

$

270

$

1,050

$

1,150

Production expenses

$

530

$

580

$

2,100

$

2,200

Exploration expenses

$

25

$

35

$

90

$

100

Depreciation, depletion and amortization

$

560

$

610

$

2,300

$

2,400

General & administrative expenses

$

180

$

200

$

775

$

825

Financing costs, net

$

105

$

115

$

440

$

470

Other expenses

$

15

$

20

$

60

$

80

Current income tax rate

0

%

5

%

0

%

5

%

Deferred income tax rate

20

%

25

%

20

%

25

%

Total income tax rate

20

%

30

%

20

%

30

%

Net earnings attributable to noncontrolling interests

$

30

$

50

$

185

$

205

CAPITAL EXPENDITURES GUIDANCE

Quarter 2

Full Year

(in millions)

Low

High

Low

High

Upstream capital

$

550

$

650

$

2,200

$

2,400

Capitalized interest

15

20

50

80

Other

20

30

50

70

Devon capital expenditures (1)

$

585

$

700

$

2,300

$

2,550

(1) Excludes capital expenditures related to EnLink.

DEVON ENERGY CORPORATION

FORWARD LOOKING GUIDANCE

Oil Commodity Hedges – As of April 27, 2018

Price Swaps

Price Collars

Period

Volume (Bbls/d)

WeightedAverage Price($/Bbl)

Volume (Bbls/d)

WeightedAverage FloorPrice ($/Bbl)

Weighted AverageCeiling Price($/Bbl)

Q2-Q4 2018

75,631

$

56.25

92,858

$

51.02

$

61.45

Q1-Q4 2019

40,130

$

58.08

54,790

$

51.72

$

61.72

Oil Basis Swaps – As of April 27, 2018

Oil Basis Swaps

Oil Basis Collars

Period

Index

Volume(Bbls/d)

WeightedAverageDifferential toWTI ($/Bbl)

Volume (Bbls/d)

WeightedAverage FloorDifferential toWTI ($/Bbl)

WeightedAverage CeilingDifferential toWTI ($/Bbl)

Q2-Q4 2018

Midland Sweet

20,491

$

(1.02

)

—

$

—

$

—

Q2-Q4 2018

Argus LLS

10,691

$

3.95

—

$

—

$

—

Q2-Q4 2018

Argus MEH

4,669

2.49

—

$

—

$

—

Q2-Q4 2018

Western Canadian Select

69,018

$

(14.91

)

1,775

$

(15.50

)

$

(13.93

)

Q1-Q4 2019

Midland Sweet

28,000

$

(0.46

)

—

$

—

$

—

Q1-Q4 2019

Argus MEH

6,000

2.49

—

$

—

$

—

Natural Gas Commodity Hedges - Henry Hub – As of April 27, 2018

Price Swaps

Price Collars

Period

Volume (MMBtu/d)

WeightedAverage Price($/MMBtu)

Volume (MMBtu/d)

WeightedAverage FloorPrice ($/MMBtu)

Weighted AverageCeiling Price($/MMBtu)

Q2-Q4 2018

357,393

$

2.96

194,795

$

2.77

$

3.10

Q1-Q4 2019

118,588

$

2.83

87,844

$

2.69

$

3.06

Natural Gas Basis Swaps – As of April 27, 2018

Period

Index

Volume (MMBtu/d)

Weighted AverageDifferential to HenryHub ($/MMBtu)

Q2-Q4 2018

Panhandle Eastern Pipe Line

93,545

$

(0.48

)

Q2-Q4 2018

El Paso Natural Gas

53,455

$

(1.17

)

Q2-Q4 2018

Houston Ship Channel

66,818

$

0.00

Q2-Q4 2018

Transco Zone 4

10,036

$

(0.03

)

Q1-Q4 2019

Panhandle Eastern Pipe Line

4,959

$

(0.81

)

Q1-Q4 2019

El Paso Natural Gas

60,000

$

(1.58

)

Q1-Q4 2019

Houston Ship Channel

72,500

$

(0.01

)

Q1-Q4 2019

Transco Zone 4

7,397

$

(0.03

)

Devon’s oil derivatives settle against the average of the prompt month
NYMEX West Texas Intermediate futures price. Devon’s natural gas
derivatives settle against the Inside FERC first of the month Henry Hub
index. Commodity hedge positions are shown as of April 27, 2018.

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